Except for the following questions, all the remaining questions have been asked in Set I.

SECTION - A

Q. 1. Answer the following questions: 1X4
(i) Under which market form, a firm is a price-taker?
(ii) Define marginal cost.
(iii) What causes an upward movement along a supply curve of a commodity?
(iv) Why does the problem of choice arise?

Q. 4. The price elasticity of supply of a commodity is 2.5. At a price of Rs. 5 per unit, its quantity supplied is 300 units. Calculate its quantity supplied at a price of Rs. 4 per unit. 3

Q. 6. What is meant by ‘change in supply’? State three factors that can cause a ‘change in supply’. 4

Q. 8. From the following table, calculate average variable cost of each given level of output: 4

Output (units)

1

2

3

4

Marginal cost (Rs.)

80

70

72

78

SECTION - B

Q. 13. Answer the following questions: 1X4 (i) The balance of trade shows a deficit of Rs. 5,000 crores and the value of imports are Rs. 9,000 crores. What is the value of exports?
(ii) Is the study of cotton textile industry a macro-economic study or a micro-economic study?
(iii) Define a tax.
(iv) Give two examples of macro studies.

Q. 14. Calculate Gross National Disposable Income from the following data: 3

Rs. (Crores)

(i) Net national product at factor cost
(ii) Net factor income from abroad
(iii) Consumption of fixed capital
(iv) Net indirect taxes
(v) Net current transfers from rest of the world

3,000
(-) 50
150
250
300

Q. 16. In an economy, investment expenditure is increased by Rs. 400 crores and marginal propensity to consume is 0.8. Calculate the total increase in income and savings. 3

Q. 17. Distinguish between average propensity to save and marginal propensity to save. The value of which of these two can be negative and when? 3

Q. 22. From the following data calculate Gross National Product Market Price by (i) income method and (ii) expenditure method. 3, 3